More aid for farmers
On Friday, the U.S. Department of Agriculture announced a second round of its Coronavirus Food Assistance Program. The measure is targeted at farmers who suffered financially due to the coronavirus outbreak.
The largest portion of the aid is going toward crops and livestock that saw significant price declines, including corn, wheat, soybeans, cattle, hogs, eggs, and milk. However, this second round also includes payments for crops that did not see a price decline or were otherwise excluded from the first round of CFAP.
Altogether, the government has allocated up to $14 billion for the agricultural program. Applications will be accepted starting Sept. 21.
More detail can be found on the USDA’s website: www.farmers.gov/cfap
Grain markets march higher
While the CFAP funds were intended to offset previous losses, the money will likely help keep farms in business, adding to next year’s production. Moreover, another sign that the USDA will help subsidize farms may embolden more aggressive actions despite the uncertainty that abounds in the COVID economy. Interestingly, markets ignored the prospect for higher production and ran higher across the board.
Grains have been more focused on strong Chinese demand and supply threats in other countries, pulling corn, wheat, and soybeans to multi-month highs. Soybeans were especially strong, nearing $10.50 per bushel, a two-year high.
NASDAQ futures get clocked
Another zig-zag week for stock index futures saw the technology sector NASDAQ tumble as Chinese-owned TikTok and WeChat were the focus of a crackdown by the U.S. Department of Commerce. NASDAQ futures fell to a five-week low late on Friday. Weak jobs data, COVID concerns and nervousness about elections contributed to a more general decline in the broader S&P stock index futures as well.
The Dow Jones stock index futures and industrial commodities fared well by comparison. Crude oil and copper, for example, gained sharply during the week.